To cut or not to cut? Fed Chairman Jerome Powell has cautioned markets that lower interest rates might not come in December. But some members of the Fed’s Board of Governors, such as Stephen Miran, an appointee and ally of President Donald Trump, want lower rates. It’s unclear what path the Fed will take.
Markets want predictable interest rates. However, that isn’t the Fed’s job. Officially, the Fed has a three-part mandate: full employment, price stability, and moderate interest rates. An unspoken agreement between politicians and central bankers has made this a de facto dual mandate focusing on labor markets and price levels. Managing the money supply addresses both concerns.
